BP’s first-quarter earnings saw a 40% drop to $2.7 billion, falling short of analyst forecasts. The London-based company’s profit decline was attributed to lower energy prices and a U.S. refinery outage, which offset the increase in oil and gas production.
Despite the earnings slump, BP maintained its dividend at 7.27 cents per share and kept the rate of its share buyback program at $1.75 billion for the next three months, similar to the previous quarter.
The company’s CEO, Murray Auchincloss, who took over from his predecessor Bernard Looney in September, has vowed to simplify operations and cut costs in the face of investor doubts over BP’s plans to reduce its focus on oil and gas and expand its low-carbon business.
BP’s first-quarter underlying replacement cost profit, the company’s definition of net income, missed the $2.87 billion consensus forecast from analysts and was well short of the $3 billion profit in the previous quarter and $5 billion a year earlier.
The results reflected lower energy prices and the impact of the outage at the Whiting refinery in Indiana, which was partially offset by strong oil trading results, higher refining margins, and increased oil and gas output.
Oil and gas production was up 2.1% from a year earlier at 2.38 million barrels of oil equivalent per day, thanks to field start-ups in Azerbaijan and the United States.
BP’s cashflow was down 34% at $5 billion after restocking of diesel and gasoline stocks ahead of summer, according to Auchincloss.
The company’s debt rose to $53 billion, and its debt-to-market capitalization ratio increased to 22% from 19.7% in the previous quarter.